OFFICE OF INSPECTOR GENERAL. U.S. Department of Health and Human Services WORK PLAN

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1 OFFICE OF INSPECTOR GENERAL U.S. Department of Health and Human Services WORK PLAN Fiscal Year 2016

2 Introductory Message from the Office of Inspector General The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) Work Plan (Work Plan) for fiscal year (FY) 2016 summarizes new and ongoing OIG reviews and with respect to HHS programs and operations. What is our responsibility? Our organization was created to protect the integrity of HHS programs and operations and the well-being of beneficiaries by detecting and preventing fraud, waste, and abuse; identifying opportunities to improve program economy, efficiency, and effectiveness; and holding accountable those who do not meet program requirements or who violate Federal health care laws. Our mission encompasses more than 100 programs administered by HHS at agencies such as the Centers for Medicare & Medicaid Services, Administration for Children and Families, Centers for Disease Control and Prevention, Food and Drug Administration, and National Institutes of Health. The amount of work conducted in each category is set by the purpose limitations in the money appropriated to OIG. OIG s funding that is directed toward oversight of the Medicare and Medicaid programs constitutes a significant portion of its total funding (approximately 76 percent in 2014). The remaining share of OIG s efforts and resources are focused on other HHS programs and management processes, including key issues, such as the accuracy of financial assistance payments, efficient and effective operation of health insurance marketplaces, safety of the Nation s food and drug supply, security of national stockpiles of pharmaceuticals for use during emergencies, and integrity of contracts and grants management processes and transactions. How and where do we operate? Who we are. OIG provides independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs and operations of HHS. OIG s program integrity and oversight activities are shaped by legislative and budgetary requirements and adhere to professional standards established by the Government Accountability Office (GAO), Department of Justice (DOJ), and the Inspector General community. OIG carries out its mission to protect the integrity of HHS programs and the health and welfare of the people served by those programs through a nationwide network of audits, investigations, and evaluations conducted by the following operating components with assistance from OIG counsel and management. The Office of Audit Services (OAS). OAS provides auditing services for HHS, either by conducting audits with its own resources or by overseeing audit work done by others. Audits examine the performance of HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are intended to provide independent assessments of HHS programs and operations. These assessments help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS.

3 The Office of Evaluation and Inspections (OEI). OEI conducts national evaluations to provide HHS, Congress, and the public with timely, useful, and reliable information on significant issues. These evaluations focus on preventing fraud, waste, and abuse and promoting economy, efficiency, and effectiveness in HHS programs. OEI reports also present practical recommendations for improving program operations. The Office of Investigations (OI). OI conducts criminal, civil, and administrative investigations of fraud and misconduct related to HHS programs, operations, and beneficiaries. With investigators working in almost every State and the District of Columbia, OI coordinates with DOJ and other Federal, State, and local law enforcement authorities. OI also coordinates with OAS and OEI when audits and evaluations uncover potential fraud. OI s investigative efforts often lead to criminal convictions, administrative sanctions, or civil monetary penalties (CMP). The Office of Counsel to the Inspector General (OCIG). OCIG provides general legal services to OIG, rendering advice and opinions on HHS programs and operations and providing all legal support for OIG s internal operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS programs, including False Claims Act, program exclusion, and CMP cases. In connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other guidance to the health care industry about the anti-kickback statute and other OIG enforcement authorities. Executive Management (EM). EM is composed of the Immediate Office of the Inspector General and the Office of Management and Policy. EM is responsible for overseeing the activities of OIG s components; setting vision and direction, in collaboration with the components, for OIG s priorities and strategic planning; ensuring effective management of budget, finance, information technology (IT), human resources, and other operations; and serving as a liaison with HHS, Congress, and other stakeholders. EM plans, conducts, and participates in a variety of cooperative projects within HHS and with other Government agencies. What do we accomplish? For FY 2015, we reported expected recoveries of more than $3 billion, consisting of nearly $1.13 billion in audit receivables and about $2.22 billion in investigative receivables, which include about $286.6 million in non-hhs investigative receivables resulting from our work in areas such as the States shares of Medicaid restitution. We also identified about $20.6 billion in savings estimated for FY 2015 on the basis of prior-period legislative, regulatory, or administrative actions that were supported by OIG recommendations. Such estimates generally reflect third-party projections (such as those by the Congressional Budget Office or HHS actuaries) made at the time the action was taken. Actual savings may be higher or lower. We reported FY 2015 exclusions of 4,112 individuals and entities from participation in Federal health care programs; 925 criminal actions against individuals or entities that engaged in crimes against HHS programs; and 682 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, CMP settlements, and administrative recoveries related to provider self-disclosure matters.

4 How do we plan our work? Work planning is a dynamic process, and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available. We assess relative risks in the programs for which we have oversight authority to identify the areas most in need of attention and, accordingly, to set priorities for the sequence and proportion of resources to be allocated. In evaluating proposals for the Work Plan, we consider a number of factors, including: mandatory requirements for OIG reviews, as set forth in laws, regulations, or other directives; requests made or concerns raised by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by partner organizations; management s actions to implement OIG recommendations from previous reviews; and timeliness. A Note About This Edition: This edition of the Work Plan, effective October 2015, describes OIG audits, evaluations, and certain legal and investigative initiatives that are continuing. The word new before a project title indicates that the project did not appear in the previous Work Plan. For each project, we include the subject, primary objective, and criteria related to the topic. At the end of each description, we provide the internal identification code for the review (if a number has been assigned) and the year in which we expect one or more reports to be issued as a result of the review. This edition also forecasts areas for which OIG anticipates planning and/or beginning work. In fiscal year (FY) 2016 and beyond, OIG will expand its focus on delivery system reform and the effectiveness of alternate payment models, coordinated care programs, and value-based purchasing. Areas under consideration for new work include, for example, a holistic examination of HHS efforts to reduce opioid abuse, adherence to safety standards in Administration for Children and Families Unaccompanied Children Program, and evaluation of CMS s Fraud Prevention System. OIG will periodically update its online Work Plan, available at The body of the Work Plan is followed by Appendix A, which describes OIG reviews related to the Patient Protection and Affordable Care Act of 2010, and Appendix B, which describes our oversight of the funding that HHS received under the American Recovery and Reinvestment Act of Because we make continuous adjustments to the Work Plan, as appropriate, we do not provide status reports on the progress of the reviews. However, if you have other questions about this publication, please contact us at public.affairs@oig.hhs.gov. OIG on the Web: Follow us on Twitter:

5 Table of Contents Page i Table of Contents Medicare Part A and Part B... 5 Hospitals... 5 Hospital-Related Policies and Practices... 5 Hospitals Billing and Payments... 7 Hospitals Quality of Care and Safety Nursing Homes Hospices Home Health Services Medical Equipment and Supplies Equipment and Supplies Policies and Practices Equipment and Supplies Billing and Payments Equipment and Supplies Quality of Care and Safety Other Providers and Suppliers Other Providers Policies and Practices Other Providers Billing and Payments Prescription Drugs Prescription Drugs Policies and Practices Prescription Drugs Billing and Payments Prescription Drugs Quality of Care and Safety Part A and Part B Contractors Oversight of Contracts Contractor Functions and Performance Other Part A and Part B Program Management Issues Provider Eligibility Delivery System Reform Medicare Part C and Part D... 27

6 Table of Contents Page ii Part C Medicare Advantage MA Organizations Compliance With Part C Requirements Part D Prescription Drug Program Medicare, Sponsor, and Manufacturer Policies and Practices Sponsor Compliance With Part D Requirements Part D Billing and Payments Medicaid Program Medicaid Prescription Drug Reviews State and Manufacturer Compliance With Medicaid Requirements State Claims for Federal Reimbursement Home Health Services and Other Community-Based Care Other Medicaid Services, Equipment, and Supplies Policies and Practices Billing and Payments State Claims for Federal Reimbursement Quality of Care and Safety of Beneficiaries State Management of Medicaid How States Fund Their Medicaid Programs State Claims for Federal Reimbursement State Adjustments of Federal Reimbursement State Program Integrity Activities and Compliance with Federal Requirements OIG Oversight of State Medicaid Fraud Control Units Medicaid Information System Controls and Security Controls To Prevent Improper Medicaid Payments Controls To Ensure the Security of Medicaid Systems and Information Medicaid Managed Care State Payments to Managed Care Entities Program Integrity in Managed Care CMS-Related Legal and Investigative Activities... 45

7 Table of Contents Page iii Legal Activities Exclusions from Program Participation Civil Monetary Penalties False Claims Act Cases and Corporate Integrity Agreements Providers Compliance with Corporate Integrity Agreements Advisory Opinions and Other Industry Guidance Provider Self-Disclosure Investigative Activities Public Health Reviews Centers for Disease Control and Prevention Food and Drug Administration Health Resources and Services Administration Indian Health Service National Institutes of Health Other Public-Health-Related Reviews Public Health Legal Activities Human Services Reviews Administration for Children and Families Other HHS-Related Reviews... 62

8 Table of Contents Page iv Financial Statement Audits and Related Reviews Financial Reviews Automated Information Systems Other HHS-Related Issues Appendixes Appendix A Affordable Care Act Reviews Health Insurance Marketplaces, Financial Assistance Payments, and Premium Stabilization Payments Payments Are taxpayer funds being expended correctly for their intended purposes? Eligibility Are the right people getting the right benefits? Management and Administration Is the Department managing and administering marketplace programs effectively and efficiently? Security Is consumers personal information safe? Medicaid and Medicare Reforms Medicaid Reviews Medicare Reviews Other Programs Recovery Act Reviews Medicare and Medicaid Adoption of Electronic Health Records Systems and Information Security Cross-Cutting Enforcement Activities Fraud and Whistleblower Reprisals... 76

9 Medicare Program Page 5 Medicare Part A and Part B Medicare Part A covers certain inpatient services in hospitals and skilled nursing facilities (SNF) and some home health services. Medicare Part B covers designated practitioners services; outpatient care; and certain other medical services, equipment, supplies, and drugs that Part A does not cover. The Centers for Medicare & Medicaid Services (CMS) uses Medicare Administrative Contractors (MAC) to administer Medicare Part A and Medicare Part B and to process claims for both parts. OIG has focused its efforts on identifying and offering recommendations to reduce improper payments, prevent and deter fraud, and foster economical payment policies. Future planning efforts for FY 2016 and beyond will include: additional oversight of hospice care, including oversight of certification surveys and hospice-worker licensure requirements; oversight of Skilled Nursing Facilities (SNF) compliance with patient admission requirements; and evaluation of CMS s Fraud Prevention System. Hospitals Acronyms and Abbreviations for Selected Terms: IME indirect medical education IMRT intensity-modulated radiation therapy IRF inpatient rehabilitation facility LTCH long-term-care hospital PPS prospective payment system RHC right heart catheterization SNF skilled nursing facility Hospital-Related Policies and Practices Reconciliations of outlier payments We will review Medicare outlier payments to hospitals to determine whether CMS performed necessary reconciliations in a timely manner to enable Medicare contractors to perform final settlement of the hospitals associated cost reports. We will also determine whether the Medicare contractors referred all hospitals that meet the criteria for outlier reconciliations to CMS. Outliers are additional payments that Medicare provides to hospitals for beneficiaries who incur unusually high costs. CMS reconciles outlier payments on the basis of the most recent cost-to-charge ratio from hospitals associated cost reports. Outlier payments also may be adjusted to reflect the time value of money for overpayments and underpayments. Without timely reconciliations and final settlements, the cost reports remain open and funds may not be properly returned to the Medicare Trust Fund. (42 CFR, (i)(4).) (OAS; W ; W ; various reviews; expected issue date: FY 2016)

10 Medicare Program Page 6 Hospitals use of outpatient and inpatient stays under Medicare s two-midnight rule We will determine how hospitals use of outpatient and inpatient stays changed under Medicare s two-midnight rule, as well as how Medicare and beneficiary payments for these stays changed, by comparing claims for hospital stays in the year prior to the effective date of the two-midnight rule to stays in the year following the effective date of that rule. We will also determine the extent to which the use of outpatient and inpatient stays varied among hospitals. CMS implemented the twomidnight rule on October 1, This rule represents a substantial change to the criteria that hospital physicians are expected to use when deciding whether to admit beneficiaries as inpatients or treat them as outpatients. (OEI; ; expected issue date: FY 2016). Medicare costs associated with defective medical devices We will review Medicare claims to identify the impact on beneficiary safety and quality of care, as well as the costs to Medicare, resulting from additional use of medical services associated with defective medical devices. Any determination of the impact on beneficiaries from a quality and safety perspective, and program costs, will require a determination of a reasonable means of tracking services from the recall of the medical devices in question. CMS has expressed concerns about the impact of the cost of replacement devices, including ancillary cost, on Medicare payments for inpatient and outpatient services. (OAS; W ; various reviews; expected issue date: FY 2016) Analysis of salaries included in hospital cost reports We will review data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reported to and reimbursed by Medicare. Employee compensation may be included in allowable provider costs only to the extent that it represents reasonable remuneration for managerial, administrative, professional, and other services related to the operation of the facility and furnished in connection with patient care. (CMS s Provider Reimbursement Manual, Part 1, Pub. No. 15-1, Ch ) Medicare does not provide any specific limits on the salary amounts that can be reported on the hospital cost report. (OAS; W ; expected issue date: FY 2016) REVISED Medicare oversight of provider-based status We will determine the number of provider-based facilities that hospitals own and the extent to which CMS has methods to oversee provider-based billing. We will also determine the extent to which provider-based facilities meet requirements described in 42 CFR Sec and CMS Transmittal A , and whether there were any challenges associated with the provider-based attestation review process. Provider-based status allows facilities owned and operated by hospitals to bill as hospital outpatient departments. Provider-based status can result in higher Medicare payments for services furnished at provider-based facilities and may increase beneficiaries coinsurance liabilities. The Medicare Payment Advisory Commission (MedPAC) has expressed concerns about the financial incentives presented by provider-based status and stated that Medicare should seek to pay similar amounts for similar services. (OEI; ; expected issue date: FY 2016)

11 Medicare Program Page 7 Comparison of provider-based and freestanding clinics We will review and compare Medicare payments for physician office visits in provider-based clinics and freestanding clinics to determine the difference in payments made to the clinics for similar procedures and assess the potential impact on Medicare of hospitals' claiming provider-based status for such facilities. Provider-based facilities often receive higher payments for some services than do freestanding clinics. The requirements to be met for a facility to be treated as provider based are at 42 CFR (d). (OAS; W ; W ; expected issue date: FY 2016) Hospitals Billing and Payments Inpatient claims for mechanical ventilation We will review Medicare payments for inpatient hospital claims with certain Medicare Severity- Diagnosis Related Group (MS-DRG) assignments that require mechanical ventilation to determine whether hospitals DRG assignments and resultant Medicare payments were appropriate. Mechanical ventilation is the use of a ventilator or respirator to take over active breathing for a patient. Claims must be completed accurately to be processed correctly and promptly. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 1, ) For certain DRGs to qualify for Medicare coverage, a patient must receive 96 or more hours of mechanical ventilation. Our review will include claims for beneficiaries who received over 96 hours of mechanical ventilation. Previous OIG reviews identified improper payments made because hospitals inappropriately billed for beneficiaries who did not receive 96 or more hours of mechanical ventilation. (OAS; W ; W ; various reviews; expected issue date: FY 2016) Selected inpatient and outpatient billing requirements We will review Medicare payments to acute care hospitals to determine hospitals compliance with selected billing requirements and recommend recovery of overpayments. Prior OIG audits, investigations, and inspections have identified areas at risk for noncompliance with Medicare billing requirements. Our review will focus on those hospitals with claims that may be at risk for overpayments. (OAS; W ; W ; W ; W ; various reviews; expected issue date: FY 2016) Duplicate graduate medical education payments We will review provider data from CMS s Intern and Resident Information System (IRIS) to determine whether hospitals received duplicate or excessive graduate medical education (GME) payments. We will also assess the effectiveness of IRIS in preventing duplicate payments for GME costs. If duplicate payments were claimed, we will determine which payment was appropriate. Prior OIG reviews have determined that hospitals have received duplicate reimbursement for GME costs. Medicare pays teaching hospitals for direct graduate medical education (DGME) and indirect medical education (IME) costs. When payments for DGME and IME costs are being calculated, no intern or resident may be counted by Medicare as more than one full-time-equivalent (FTE) employee. (42 CFR (b) and (f)(1)(iii).) The primary purpose of IRIS is to ensure that no intern or resident is counted as more than one FTE. (OAS; W ; various reviews; expected issue date: FY 2016)

12 Medicare Program Page 8 Indirect medical education payments We will review provider data to determine whether hospitals IME payments were made in accordance with Federal regulations and guidelines. We will determine whether the IME payments were calculated properly. Prior OIG reviews have determined that hospitals have received excess reimbursement for IME costs. Teaching hospitals with residents in approved GME programs receive additional payments for each Medicare discharge to reflect the higher indirect patient care costs of teaching hospitals relative to those of nonteaching hospitals. (42 U.S.C. 1395ww(d)(5)(B).) The additional payments, known as the IME adjustments, are calculated using the hospital s ratio of resident FTEs to available beds. (OAS; W ; W ; expected issue date: FY 2016) Outpatient dental claims We will review Medicare hospital outpatient payments for dental services to determine whether such payments were made in accordance with Medicare requirements. OIG audits have indicated that hospitals received Medicare reimbursement for noncovered dental services, resulting in significant overpayments. Dental services are generally excluded from Medicare coverage, with a few exceptions. (Social Security Act, 1862(a)(12).) For example, Medicare reimbursement is allowed for the extraction of teeth to prepare the jaw for radiation treatment (CMS s Medicare Benefit Policy Manual, Pub. No , Ch. 15, 150). (OAS; W ; W ; various reviews; expected issue date: FY 2016) Nationwide review of cardiac catheterizations and endomyocardial biopsies We will review Medicare payments for right heart catheterizations (RHCs) and endomyocardial biopsies billed during the same operative session and determine whether hospitals complied with Medicare billing requirements. Previous OIG reviews have identified inappropriate payments when hospitals were paid for separate RHC procedures when the services were already included in payments for endomyocardial biopsies. To be processed correctly and promptly, a bill must be completed accurately. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 1, ) (OAS; W ; W ; various reviews; expected issue date: FY 2016) Payments for patients diagnosed with kwashiorkor We will review Medicare payments made to hospitals for claims that include a diagnosis of kwashiorkor to determine whether the diagnosis is adequately supported by documentation in the medical record. To be processed correctly and promptly, a bill must be completed accurately. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 1, ) A diagnosis of kwashiorkor on a claim substantially increases the hospitals reimbursement from Medicare. Kwashiorkor is a form of severe protein malnutrition that generally affects children living in tropical and subtropical parts of the world during periods of famine or insufficient food supply. It is typically not found in the United States. Prior OIG reviews have identified inappropriate payments to hospitals for claims with a kwashiorkor diagnosis. (OAS; W ; W ; various reviews; expected issue date: FY 2016) Bone marrow or stem cell transplants We will review Medicare payments to hospitals for bone marrow or stem cell transplants to determine whether the payments were made in accordance with Federal rules and regulations.

13 Medicare Program Page 9 Bone marrow or peripheral blood stem cell transplantation includes mobilization, harvesting, and transplant of bone marrow or peripheral blood stem cells and the administration of high-dose chemotherapy or radiotherapy before the actual transplant. When bone marrow or peripheral blood stem cell transplantation is covered, all necessary steps are included in coverage. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 3, 90.3.) Bone marrow or stem cell transplants are covered under Medicare only for specific diagnoses. Procedure codes must be accompanied by the diagnosis codes that meet specified coverage criteria. Prior OIG reviews have identified hospitals that have incorrectly billed for bone marrow or stem cell transplants. (OAS; W ; expected issue date: FY 2016) Review of hospital wage data used to calculate Medicare payments We will review hospital controls over the reporting of wage data used to calculate wage indexes for Medicare payments. Prior OIG wage index work identified hundreds of millions of dollars in incorrectly reported wage data and resulted in policy changes by CMS with regard to how hospitals reported deferred compensation costs. Hospitals must accurately report wage data to CMS annually to develop wage index rates. (Social Security Act, 1886(d)(3) and 1886(d)(3)(E).) (OAS; W ; W ; various reviews; expected issue date: FY 2016) Intensity-modulated radiation therapy We will review Medicare outpatient payments for intensity-modulated radiation therapy (IMRT) to determine whether the payments were made in accordance with Federal rules and regulations. IMRT is an advanced mode of high-precision radiotherapy that uses computer-controlled linear accelerators to deliver precise radiation doses to a malignant tumor or specific areas within the tumor. Prior OIG reviews have identified hospitals that have incorrectly billed for IMRT services. To be processed correctly and promptly, a bill must be completed accurately. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 1, ) In addition, certain services should not be billed when they are performed as part of developing an IMRT plan. (CMS s Medicare Claims Processing Manual, Pub. No , Ch. 4, ) (OAS; W ; various reviews; expected issue date: FY 2016) NEW Medical device credits for replaced medical devices We will determine whether Medicare payments for replaced medical devices were made in accordance with Medicare requirements. Medical devices are implanted during an inpatient or an outpatient procedure. Such devices may require replacement because of defects, recalls, mechanical complication, etc. Federal regulations require reductions in Medicare payments for the replacement of implanted devices. (42 CFR and ). Prior OIG reviews have determined that MACs have made improper payments to hospitals for inpatient and outpatient claims for replaced medical devices. (OAS; W ; various reviews; expected issue date: FY 2016; work in progress) NEW Medicare payments during MS-DRG payment window We will review Medicare payments to acute care hospitals to determine whether certain outpatient claims billed to Medicare Part B for services provided during inpatient stays were allowable and in accordance with the inpatient prospective payment system. Certain items, supplies, and services furnished to inpatients are covered under Part A and should not be billed separately to Part B. (42 CFR and 410.3). Prior OIG audits, investigations, and inspections have identified this area

14 Medicare Program Page 10 as at risk for noncompliance with Medicare billing requirements. (OAS; W ; expected issue date: FY 2016) Hospitals Quality of Care and Safety Inpatient rehabilitation facilities adverse events in postacute care for Medicare beneficiaries We will estimate the national incidence of adverse and temporary harm events for Medicare beneficiaries receiving postacute care in inpatient rehabilitation facilities (IRFs). We will also identify factors contributing to these events, determine the extent to which the events were preventable, and estimate the associated costs to Medicare. IRFs are inpatient facilities that provide intensive rehabilitation therapy to patients recovering from illness, injury, or surgery, typically consisting of at least 3 hours of therapy per day. Upon discharge from the hospital, IRF residents often require extensive services to improve functioning before returning home. IRFs provide 11 percent of postacute facility care and have experienced rapid growth over the last decade. IRF care accounted for $7 billion in Medicare expenditures in (OEI; ; expected issue date: FY 2016) Long-term-care hospitals adverse events in postacute care for Medicare beneficiaries We will estimate the national incidence of adverse and temporary harm events for Medicare beneficiaries receiving care in long-term-care hospitals (LTCHs). We will also identify factors contributing to these events, determine the extent to which the events were preventable, and estimate the associated costs to Medicare. LTCHs are inpatient hospitals that provide long-term care to clinically complex patients, such as those with multiple acute or chronic conditions. Medicare beneficiaries typically enter LTCHs following an acute-care hospital stay to receive intensive rehabilitation and medical care. LTCHs are the third-most-common type of postacute care facility after SNFs and IRFs, accounting for nearly 11 percent of Medicare costs for post-acute care ($5.4 billion in FY 2011). (OEI; ; expected issue date: FY 2016) Hospital preparedness and response to high-risk infectious diseases We will describe hospitals efforts to prepare for the possibility of public health emergencies resulting from infectious diseases. Several HHS agencies, including the Centers for Disease Control and Prevention (CDC), the Office of the Assistant Secretary for Preparedness and Response (ASPR), and CMS provide resources, i.e., guidance and support, for hospitals as they prepare. Additionally, we will determine hospital use of HHS resources and identify lessons learned through recent experiences with pandemic or highly contagious diseases, such as Ebola. Prior OIG work identified shortcomings in such areas as community preparedness for a pandemic (2009) and hospital preparedness for a natural disaster (i.e., Superstorm Sandy, 2013). (OEI; ; expected issue date: FY 2016) Hospitals electronic health record system contingency plans We will determine the extent to which hospitals comply with contingency planning requirements of the Health Insurance Portability and Accountability Act (HIPAA). We will also compare hospitals' contingency plans with government- and industry-recommended practices. The HIPAA Security Rule requires covered entities to have a contingency plan that establishes policies and procedures for

15 Medicare Program Page 11 responding to an emergency or other occurrence that damages systems that contain protected health information (45 CFR, Part (7)(i)). (OEI; ; expected issue date: FY 2016) NEW CMS validation of hospital-submitted quality reporting data We will determine the extent to which CMS validated hospital inpatient quality reporting data. Section 1886(b)(3)(B)(viii)(XI) of the Social Security Act gives CMS the authority to conduct validation of its quality reporting program. CMS uses these quality data for the hospital value-based purchasing program and the hospital acquired condition reduction program. Therefore their accuracy and completeness are important. This study will also describe the actions that CMS has taken as a result of its validation. (OEI ; expected issue date: FY 2016, ACA) Nursing Homes Acronyms and Abbreviations for Selected Terms: ACA Affordable Care Act CMS Centers for Medicare & Medicaid Services SNF skilled nursing facility National Background Check Program for long-term-care employees We will report on the implementation status and early results for the National Background Check Program for long-term-care employees from the first 4 years of the program. Section 6201 of the Patient Protection and Affordable Care Act (ACA) requires the Secretary of Health and Human Services to carry out a nationwide program for States to conduct national and State background checks for prospective employees of nursing facilities and other long-term-care providers. The program is administered by CMS. To carry out the nationwide program, CMS has issued solicitations for grant awards. All States, the District of Columbia, and U.S. territories are eligible to be considered for a grant award. (OEI; ; expected issue date: FY 2016; ACA) NEW Skilled nursing facility prospective payment system requirements We will review compliance with various aspects of the skilled nursing facility (SNF) prospective payment system, including the documentation requirement in support of the claims paid by Medicare. Prior OIG reviews have found that Medicare payments for therapy greatly exceeded SNF s cost for therapy. In addition, we have found that SNFs have increasingly billed for the highest level of therapy even though key beneficiary characteristics remained largely the same. We will determine whether SNF claims were paid in accordance with Federal laws and regulations. All documentation requirements specified in 42 CFR must be met to ensure that SNF care is reasonable and necessary. (77 Fed. Reg , 78 Fed. Reg ). Such SNF documentation includes (1) a physician order at the time of admission for the resident s immediate care (2) a comprehensive assessment, and (3) a comprehensive plan of care prepared by an interdisciplinary team that includes the attending physician, a registered nurse, and other appropriate staff. Prior OIG audits, investigations, and inspections have identified areas at risk for noncompliance with SNF Medicare billing requirements. (OAS; W ; various reviews; expected issue date: FY 2016; work in progress)

16 Medicare Program Page 12 Hospices Acronyms and Abbreviations for Selected Terms: CoP conditions of participation REVISED Hospice general inpatient care We will review the use of the general inpatient care level of the Medicare hospice benefit. We will assess the appropriateness of hospices general inpatient care claims and the content of election statements for hospice beneficiaries who receive general inpatient care. We will also review hospice medical records to address concerns that this level of hospice care is being billed when that level of service is not medically necessary. We will review beneficiaries plans of care and determine whether they meet key requirements. Hospice care is palliative rather than curative. When a beneficiary elects hospice care, the hospice agency assumes the responsibility for medical care related to the beneficiary s terminal illness and related conditions. Federal regulations address Medicare conditions of participation (CoP) for hospices. (42 CFR Part 418.) Beneficiaries may revoke their election of hospice care and return to standard Medicare coverage at any time. (42 CFR ) In addition, we will also determine whether Medicare payments for hospice services were made in accordance with Medicare requirements. (OEI; ; ; expected issue date: FY 2016; and OAS; W ; various reviews; expected issue date: FY 2016) Home Health Services Acronyms and Abbreviations for Selected Terms: CMS Centers for Medicare & Medicaid Services HHA home health agency PPS prospective payment system Home health prospective payment system requirements We will review compliance with various aspects of the home health prospective payment system (PPS), including the documentation required in support of the claims paid by Medicare. We will determine whether home health claims were paid in accordance with Federal laws and regulations. A prior OIG report found that one in four home health agencies (HHAs) had questionable billing. Further, CMS designated newly enrolling HHAs as high-risk providers, citing their record of fraud, waste, and abuse. Since 2010, nearly $1 billion in improper Medicare payments and fraud has been identified relating to the home health benefit. Home health services include part-time or intermittent skilled nursing care, as well as other skilled care services, such as physical, occupational, and speech therapy; medical social work; and home health aide services. (OAS; W ; W ; W ; various reviews; expected issue date: FY 2016)

17 Medicare Program Page 13 Medical Equipment and Supplies Acronyms and Abbreviations for Selected Terms: CMS Centers for Medicare & Medicaid Services LCD local coverage determination MIPPA Medicare Improvements for Patients and Providers Act PMD power mobility device Equipment and Supplies Policies and Practices Power mobility devices lump-sum purchase versus rental We will determine whether potential savings can be achieved by Medicare if certain power mobility devices (PMDs) are rented over a 13-month period rather than acquired through a lump-sum purchase. (OAS; W ; expected issue date: FY 2016) Competitive bidding for medical equipment items and services mandatory postaward audit We will review the process CMS used to conduct competitive bidding and to make subsequent pricing determinations for certain medical equipment items and services in selected competitive bidding areas under rounds 1 and 2 of the competitive bidding program. Federal law requires OIG to conduct postaward audits to assess this process. (Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), 154(a)(1)(E).) (OAS; W ; various reviews; expected issued date: FY 2016) NEW Orthotic braces reasonableness of Medicare payments compared to amounts paid by other payers We will determine the reasonableness of Medicare fee schedule amounts for orthotic braces. We will compare Medicare payments made for orthotic braces to amounts paid by non-medicare payers, such as private insurance companies, to identify potentially wasteful spending. We will estimate the financial impact on Medicare and on beneficiaries of aligning the fee schedule for orthotic braces with those of non-medicare payers. (OAS; W ; expected issue date: FY 2016). NEW Osteogenesis stimulators lump-sum purchase versus rental We will determine whether potential savings can be achieved by Medicare and its beneficiaries if osteogenesis stimulators are rented over a 13-month period rather than acquired through a lumpsum purchase. These devices, also known as bone-growth stimulators, apply an electric current or ultrasound to the spine or a long bone (e.g., the femur) and are used when a fusion or fracture failed to heal or after a multilevel spinal fusion. Medicare payments from were approximately $286 million. Because osteogenesis stimulators are categorized as inexpensive and other routinely purchased items, the beneficiary has the option of either purchasing or renting the stimulators. (OAS; W ; expected issue date: FY 2016).

18 Medicare Program Page 14 Equipment and Supplies Billing and Payments Power mobility devices supplier compliance with payment requirements We will review Medicare Part B payments for suppliers of power mobility devices (PMD) to determine whether such payments were in accordance with Medicare requirements. We will focus particularly on whether PMDs are medically necessary and whether Medicare payments for PMD claims submitted by medical equipment suppliers are supported in accordance with requirements at 42 CFR (OAS; W ; various reviews; expected issue date: FY 2016) Nebulizer machines and related drugs supplier compliance with payment requirements We will review Medicare Part B payments for nebulizer machines and related drugs to determine whether medical equipment suppliers claims for nebulizers and related drugs are medically necessary and are supported in accordance with Medicare requirements. For calendar year (CY) 2014, Medicare paid approximately $632.8 million for inhalation drugs. With an improper payment rate of 42 percent, inhalation drugs were sixth on a list of the top 20 DMEPOS services with the highest improper payments in the 2014 Comprehensive Error Rate Testing report. Medicare requires that such items be "reasonable and necessary." (Social Security Act 1862(a)(1)(A).) Further, the local coverage determinations (LCDs) issued by the four Medicare contractors that process medical equipment and supply claims include utilization guidelines and documentation requirements. (OAS; W ; W ; expected issue date: FY 2016) Diabetes testing supplies effectiveness of system edits to prevent inappropriate payments for blood glucose test strips and lancets to multiple suppliers We will review Medicare s claims processing edits (special system controls) designed to prevent payments to multiple suppliers of home blood glucose test strips and lancets and determine whether they are effective in preventing inappropriate payments. Prior OIG work found that inappropriate payments were made to multiple medical equipment suppliers for test strips and lancets dispensed to the same beneficiaries with overlapping service dates. The LCDs issued by the pertinent claims processing contractors state that medical equipment suppliers may not dispense test strips and lancets until beneficiaries have nearly exhausted the previously dispensed supplies. The LCDs also require that beneficiaries or their caregivers specifically request refills before the suppliers dispense them. Medicare does not pay for items or services that are not reasonable and necessary. (Social Security Act, 1862(a)(1)(A).) (OAS; W ; W ; various reviews; expected issue date: FY 2016) NEW Orthotic braces supplier compliance with payment requirements We will review Medicare Part B payments for orthotic braces to determine whether durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers claims were medically necessary and were supported in accordance with Medicare requirements. Prior OIG work indicated that some DMEPOS suppliers were billing for services that were medically unnecessary (e.g. beneficiaries receiving multiple braces and referring physician did not see the beneficiary) or were not documented in accordance with Medicare requirements. Medicare requires that such items be "reasonable and necessary." (Social Security Act 1862(a)(1)(A).) Further, LCDs issued by the four

19 Medicare Program Page 15 Medicare contractors that process DMEPOS claims include utilization guidelines and documentation requirements for orthotic braces. (OAS; W ; expected issue date: FY 2016). NEW Increased billing for ventilators We will describe billing trends for ventilators, Respiratory Assist Devices (RAD), and Continuous Positive Airway Pressure (CPAP) devices from as well as examine factors associated with the increase in ventilator claims. CMS and its contractors have expressed concerns about the increase in billing for ventilators, specifically HCPCS code E0464 [a pressure support ventilator with volume control mode and a noninvasive interface (e.g., mask)]. From 2013 to 2014, there has been a 127 percent increase in allowed amounts for E0464. The number of beneficiaries receiving a pressure support ventilator increased from 8,633 in 2013 to 19,085 in Suppliers may be inappropriately billing for ventilators for beneficiaries with non-life-threatening conditions, which would not meet the medical necessity criteria for ventilators and might instead be more appropriately billed to codes for RADs or CPAPs. The CMS National Coverage Determination Manual stipulates that ventilators are covered for the treatment of severe conditions associated with Neuromuscular diseases, thoracic restrictive diseases, and chronic respiratory failure consequent to chronic obstructive pulmonary disease. Ventilators would not be considered reasonable and necessary to treat any of the conditions described in the LCDs for either CPAPs or RADs. We will also examine the impact of the Competitive Bidding Program on ventilator billing trends. (OEI; ; expected issue date: FY 2016) Equipment and Supplies Quality of Care and Safety Access to durable medical equipment in competitive bidding areas We will determine the effects of the competitive bidding program on Medicare beneficiaries' access to certain types of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) subject to competitive bidding. In an effort to reduce waste, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) updated Medicare s payment system for certain DMEPOS from a fee schedule to a competitive bidding program. Under this program, DMEPOS suppliers compete on price to supply to particular geographic areas. Anecdotal reports show that competitive bidding has led to reduced access to DME and, in turn, compromised the quality of care beneficiaries receive. (OEI; ; expected issue date: FY 2016) Other Providers and Suppliers Acronyms and Abbreviations for Selected Terms: ASC ambulatory surgical center BLS Bureau of Labor Statistics CMS Centers for Medicare & Medicaid Services ESRD end-stage renal disease IRF inpatient rehabilitation facility PPS prospective payment system

20 Medicare Program Page 16 Other Providers Policies and Practices Ambulatory surgical centers payment system We will review the appropriateness of Medicare s methodology for setting ambulatory surgical center (ASC) payment rates under the revised payment system. We will also determine whether a payment disparity exists between the ASC and hospital outpatient department payment rates for similar surgical procedures provided in both settings. A change in Federal law required the Secretary to implement a revised payment system for surgical services furnished in ASCs beginning January 1, Accordingly, CMS implemented a revised ASC payment system modeled on the Outpatient Prospective Payment System. (MMA, 626.) (See also 42 CFR ) (OAS; W ; W ; W ; various reviews; expected issue date: FY 2016) End-stage renal disease facilities payment system for renal dialysis services and drugs We will review Medicare payments for and utilization of renal dialysis services and related drugs pursuant to the new bundled end-stage renal disease (ESRD) PPS. We will compare facilities' acquisition costs for certain drugs to inflation-adjusted cost estimates and determine how costs for the drugs have changed. Previous OIG work found that data from the Bureau of Labor Statistics (BLS) did not accurately measure changes in facilities acquisition costs for high-dollar ESRD drugs. However, CMS has based the ESRD PPS price updates on wage and price proxy data from BLS. Effective January 1, 2011, Federal law required CMS to begin implementing a new system that bundles all costs related to ESRD care (including drugs that were previously separately billable) into a single per-treatment payment. (Social Security Act, 1881(b)(14)(A)(i).) The bundled rate must be updated annually to reflect changes in the price of goods and services used in ESRD care. (75 Fed. Reg at page (Aug. 12, 2010).) (OAS; W ; W ; various reviews; expected issue date: FY 2016) NEW Ambulatory surgical centers quality oversight We will review Medicare s quality oversight of ASCs. Previous OIG work found problems with Medicare s oversight system, including finding spans of five or more years between certification surveys for some ASCs, poor CMS oversight of State survey agencies and ASC accreditors, and little public information on the quality of ASCs. Medicare sets minimum health and safety requirements for ASCs through the conditions of coverage. (Social Security Act, 1832 (a) (2) (F) (i).) CMS requires that ASCs become Medicare-certified by a State survey and certification agency or privately accredited to show that they meet the conditions. (Social Security Act, 1865 and 42 CFR Part 416) (OEI; ; expected issue date: FY 2017) Other Providers Billing and Payments Ambulance services questionable billing, medical necessity, and level of transport We will examine Medicare claims data to assess the extent of questionable billing for ambulance services, such as transports to dialysis facilities that potentially never occurred or potentially were medically unnecessary. We will also determine whether Medicare payments for ambulance services were made in accordance with Medicare requirements. Prior OIG work found that Medicare made